Page 50 - KFTL Report

KFTL DUE DILIGENCE – Kingston, Jamaica An example 5X5 Risk Matrix.
KFTL - RISK PROFILE
LOW
MEDIUM
HIGH
EXTREME
US$ Revenue
< USD500K
< USD1.0M
< USD3M
< USD7M
>USD7M
Impact on KFTL
Environmental & Natural Hazards
<1%
Isolated non-compliance or breach; minimal failure of internal controls managed by normal operations
Minor physical or environmental impact; hazards immediately controlled with local resources
Contained non-compliance or breach with short term significance; some impact on normal operations
< 10 %
< 15 %
Major physical or environmental impact; hazard extending off-site; external services required to manage
Major breach with formal inquiry; critical failure of internal controls; widespread adverse publicity
> 15 %
Project Management
Delay < 1% of timeline
or cost overrun by < 1% contract value
<3%
Delay < 3% of timeline
or cost overrun by < 3% contract value
Delay < 5% of timeline
or cost overrun by < 5% contract value
Delay < 10% of timeline
or cost overrun by < 10% contract value
Delay > 10% of timeline
or cost overrun by > 10% contract value
Health & Safety
First Aid only required
Minor medical treatment with or without lost time
Significant injury involving medical treatment and lost time
Significant public criticism with or without media attention
Individual fatality or serious long term injury
Multiple fatatlities or extensive long term injury
Image & Reputation
Isolated, internal or minimal adverse attention or complaint
Heightened local community concern or criticism
Serious public or media outcry; broad media attention
Extensive public outcry; potential national media attention
Minimal physical or environmental impact; isolated hazards; dealth with through normal ops
Significant physical or enviornmental impact; hazards contained with assistance of external resources
Extensive physical or environmental impact extending off-site; managed by external services; long term remediation required
Regulatory & Governance
Serious breach involving statutory authority or investigation; significant failure of internal controls; adverse publicity at local level
Extensive breach involving multiple individuals; potential litigation; viability of organisation threatened
Contractual & Legal
Extensive fines and litigation with possible class action; threat to visibility of program or service
Human Resources
Isolated non-compliance or breach; negligable financial impact
Routine HR issues / Employee satisfaction >80% / Attrition rate < 5%
Contained non-compliance or breach with short term significance and minor financial impact
Some short term staff morale problems / Employee satisfaction < 80% / Attrition rate < 7%
Serious breach involving statutory authority or investigation; prosecution possible with significant financial impact
Widespread staff morale problems; key employees leave / Employee satisfaction < 72 % / Attrition rate < 10%
Major breach with fines and litigation; long term significance and major financial impact
Some key employees leave; high staff turnover; poor reputation as an employer / Employee satisfaction < 65% / Attrition rate < 12%
A large number of key employees or directors leave / Employee satisfaction < 50% / Attrition rate > 12%
Consequences
Risk matrix is Trent Enterprise Risk Management Policy & Framework example
13.1.3 KFTL Risk Workshop Summary:
Trent facilitated a three (3) hour workshop session with various technical and management persons from KFTL engineering department.
With very limited data and information, and minimal evidence, discussing and debating each risk item was quite lengthy as a logical and realistic agreement was reached with respect to that risks impact to KFTL.
Due to the above, there was insufficient time to cover all tasks that were plotted on the whiteboard (with input from various KFTL technical personnel) at the beginning of the week.
This approach to ‘Risk Based Decision Making’ should be completed for each and every risk item – and be adopted as part of the KFTL engineering processes and procedures - and preferably across KFTL as a whole. This would allow for a very clear picture to be presented to KFTL CEO highlighting size of risks across all departments, with supportive comment, potential costs and severities, and allow for a prioritised spending program that aligns with the financial and business goals of KFTL.
TRENT ASSOCIATES 50
Likelihood
1 - Rare 2 - Unlikely 3 - Possible 4 - Likely 5 - Almost certain 0% - 5% 6% - 25% 26% - 50% 51% - 75% > 75%